Brand Management 1
Lecture 8
POSITIONING (GUIDING PRINCIPLES)
Introduction
This lecture discusses dimensions of strong positioning. What is it that happens to your brand in
terms of its strategic placement on the market and future direction is discussed hereunder.
Competition drives customers to go by comparisons and a process of selection, which is
governed by four fundamental questions – brand for what; brand for whom; brand for when; and,
brand against whom.
The discussion touches upon the abovementioned questions that you undertake while positioning
your brand to essentially make it distinguishable from others. With that understanding, effort is
made to define positioning and then discuss various components of the definition in relation to a
hypothetical positioning statement.
Strong Positioning
A strong positioning has the following properties1:
·
Unique valued place
A strong brand position means a brand has a unique, credible, sustainable, and valued place
in customers’ mind.
·
Revolves around a benefit
It revolves around a benefit, which makes the brand stand apart from competition.
·
Provides focus
It makes the organization focus its resources and follow the right direction.
·
Externally driven
Positioning is externally driven, meaning it has to be owned by customers.
·
New avenues for brand leveraging
Good positioning opens many new avenues for the brands to leverage themselves in areas
of growth.
·
Key determinant of operational strategies
Positioning is the key determinant of key operational strategies that form a company’s
strategic direction.
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All the above factors mean that through positioning you can distinguish your brand from the rest
of the crowd. You do that by communicating the distinctive characteristics of your brand. The
prospects already have a picture in their minds. You capitalize on that.
In case yours is a new brand, you must try hard to create a position which is unique, and then
must not stop there. You communicate that by being the first one to start the communication
process and keep communicating (regularly or momentarily) that until you have created a
position in customers’ mind.
What is different about your brand does appeal to customers. And, this appeal results from an
analytical process based on the following four questions2.
1. A brand for what? This refers to brand promise and the benefit – an orange drink having
real orange pulp can be positioned by claiming that benefit. You are positioning the product
against no-pulp, which is the market norm. Therefore, you are manipulating the picture that
already is in consumer’s mind.
2. A brand for whom? This refers to the target segment. It is important to understand the
category in absolute clarity and the segments it consists of. You position your brand for the
right target segment and not others.
3. A brand for when? This refers to the occasion when the product will be used. Milk is milk,
and it can be drunk any time of the day by anyone. But, if you introduce an offering
With features offering special benefits to tea drinkers, you position that milk for that
purpose and communicate with tea drinkers not to deny themselves the benefit of
enjoying the best milk good tea deserves. If you find out as part of your effort to expand
the category, through research and informal communication, that consumers are looking
for a milk variation best suited to desserts, then you should position a milk product for
that purpose and communicate what it is not. This implies that you highlight the special
nature of that milk and tell you prospects that it is not the ordinary thing; rather it is
something special that needs their attention to satisfy a special need.
4. A brand against whom? In the competitive context, it explains competitors from whom
we expect to capture business. By introducing milk offerings that are so different in
character you should know the competitors as well as your own business that may be
Affected by those introductions.
Positioning, therefore, means that all consumer choices are based on comparison and a
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selection process defined by the questions we have just discussed above. These questions help
position a new brand by making brand’s contribution obvious to consumers.
Definition
With the understanding developed through the above discussion, we can define positioning as
follows:
“It is a concise statement that summarizes brand’s commitment or promise to target
consumers and actively communicates the advantage over competing brands.”
Going by the definition, positioning has three primary components3:
·
The component of company business
·
The component of target market
·
The component of point of difference and key benefits
Understanding of components through an example
In order to better understand the components let’s develop and discuss the positioning
statement of the fast food set-up.
“Brand XYZ seeks to be perceived as top quality player in the area of fast food of international
Figure
22
The Positioning Map
Price
H
i
g
h
standards. It intends to sell price-effective,
high-quality, cold gourmet
sandwiches
delivered free primarily at lunch time”.
XYZ is talking about company business, the
category, and promising its target market
fullest value for their
money through
differentiated features, while fulfilling three
fundamental determinants
of
purchase, that is
– Affordability -
Gap – filled
by XYZ
consumer
A
– Quality Q
– Accessibility A
With the components discussed, let us take a
look at the positioning map every good
organization should make to see how best
can it formulate its strategic moves in light
of the positioning?
Low
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Hi
gh
Quality
Let’s discuss the three components for a better understanding by relating those to the definition
of positioning.
Clarity about business
·
What exactly is the category and who are the players? Know your competitors, assess
their roles, and understand the category for an accurate definition of your own business.
·
What is the size and growth rate? How has it shaped up over the years? Refer to industry
analysis and see how different players have been playing the game. What have been the
growth patterns in terms of the industry, major players, and your own firm?
·
What are the entry barriers? Are there any resource constraints? Is the company fully
capable of deploying resources for a comprehensive communication campaign? Without
communication, positioning will not come to life.
·
Will the market value our participation? Is there something missing from the market? Are
we really going to fulfill a need that genuinely seeks fulfillment? If yes, then the market
will definitely value our participation.
·
Are there promises for multi-segment growth? Are we going to get into an area that will
go across related businesses and allow us to participate in those? Company XYZ should
know from the start that the potential to get into small restaurants (after having started
delivery business) offers itself in all its forms and the company should be formulating its
moves, adjusting promises and positioning its products in a way that multi-segmental
growth becomes its hallmark.
This lecture continues to discuss the components of definition of positioning. The first
component of “clarity about business and category” having been discussed in the previous
lecture, the discussion now moves on to “clarity about target market” and “clarity about point
of difference”. An effort is also made to discuss why does the need arise to reposition the brand
for considerations of growth and expansion.
Clarity about target market
·
Does the market we are trying to reach fall within the target range? The product has to
have complete compatibility with the likes and preferences of the target market. Creating
taste profile and visual aspects of cold sandwiches by company XYZ in dissonance with
the taste of professionals wanting to have sandwiches at lunch time will keep the product
out of the range of the target market. The product must look like the one created for the
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target. It must taste like the one preferred by the target. And, it must be priced within a
range acceptable to the target.
·
Do they consider themselves as part of the target market? Offering cold sandwiches that
basically have western taste and looks may not appeal to a working class that does not
prefer any side of western culture. Such customers may not look upon themselves as the
target for the product being offered to them.
·
Are they reachable? The target market must be reachable through the channels that a
company may use as chain of supply. Not having effective distribution in a geographical
area will deprive many potential customers of using your product and hence undermine
brand’s value.
·
Will the target market be interested in the point of difference? The question of “a product
for whom” is applicable here. Fabricating a driver’s cabin on an agricultural tractor may
not attract many customers as another feature, for the agriculturists may be looking for
something with better application to tilling of land. You have to have complete clarity
about the point of difference the prospects are interested in. The positioning of the brand
otherwise will not be very effective.
·
Why have they not been approached before? In case the target market has not been
approached for features that you may find attractive for them, think about any constraints
that may impede your efforts. Do your homework properly and then decide to take the
strategic action. Working on product features requiring exorbitant investment may not be
worth the effort. The objective is to offer value to customer and also create value for the
company to improve profitability. You have to maintain balance between the two.
Clarity about point of difference
·
Is the key benefit important to customers? Very much in line with the preceding
discussion, you have to determine that the key benefit is relevant for the customers. The
target market of a small-sized family car may not be interested in benefits offered by
sports models. Such benefits may be very attractive, but they are not important to the
target customers. Can we really deliver it? Has it have any elements of wishes? If the
company does not have the capability, due to any given reasons, then the point of
difference remains just a wish devoid of reality. Brand managers should not tax their
energies on such wishful ventures.
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·
Can we sustain this point of difference over time? A very important question, it must be
asked and answered a lot of times before positioning a brand. Company XYZ has to make
it absolutely sure that it can deliver the sandwiches as it promises to its customers.
Sustainable ability and effort are more important than the initial enthusiasm to undertake
the project. The company must be able to always deliver the way it envisages while
defining the position of its brand.
·
Can we further fortify it? The beauty of creating a position for the brand lies in further
fortifying it. Fortification of positioning comes through factors like having technology
edge, quality human resource, and financial resource to name a few. At the same time, the
market must offer you the opportunity to involve your resources in fortifying the position
of your brand. Entering with a quality product and all the resources in a market that is
shrinking may not offer you the opportunity to fortify your brand’s position.
·
Where can it place us on the brand value pyramid? Clarity about which stage of the value
pyramid the product belongs is important. It enables you to formulate compatible
strategic moves to work on the position of the brand.
Ramifications caused by a change in positioning
Subtle (not very obvious) changes are caused to positioning of your brand as and when
you grow and expand. The very factor of staying current and contemporary brings such
slight changes. You are getting into innovations and raising your standards to keep
occupying the brand pinnacle position.
A change in features and attributes will and should cause a change in price. An upward
change in price is taken for granted. A downward change can also occur due to changing
market conditions. You must stay sensitive to any ramifications in terms of segmental
changes. If such changes occur, then you must be ready to make adjustments to your
communication tactics.
Sheer reinforcement of the delivery concept at company XYZ may necessitate new
equipment and better logistics. Growth potential will necessitate (part of the vision)
putting up of small utility restaurants. It will cause a change in the positioning of the
brand, which before the introduction of restaurants is all about delivering free to
customers. The company with the induction of restaurants is now attracting customers to
its points of sale. This shift may call for a change in positioning, which in turn means
adjusting your communication strategies.
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Adjusting and then strengthening your brand’s position becomes an objective, because
that brings the brand more and more credibility. This becomes a case of meeting growth
with credibility. That is why it is said that positioning is the determinant of key
operational strategies.
The factors that we have discussed definitely have a bearing on pricing, distribution, and
investment strategies as primary strategies and also on a few other associated strategies
like location of restaurants and the decision to go or not go for franchising etc.
Ramifications of a shift in positioning must be considered very carefully. Credibility
must never be lost, for the established position in the mind of the customer has to be not
only maintained but fortified, whenever possible.
A real life example of a shift in positioning by a major European car manufacturer Volvo
explains the phenomenon with authenticity1. This maker of cars is known for safety
standards. Communication about those features has always been the hallmark of Volvo’s
advertising and brand contract to maintain that particular position of safety.
The maker decided to change the position to high-performance cars instead of
maintaining the position of intelligent design with focus on safety features. It was such a
departure from the original position that prospects could not accept that information on
high performance. Their over-simplified mind had safety features as the established
position occupied by Volvo. A sudden departure from the original position to the one
adopted made the prospects think the company probably had compromised the safety
features. The shift in positioning was not managed with credibility. Sales dropped!
POSITIONING – GUIDING PRINCIPLES
1. Update your position as necessary
Before updating positioning, one must take a look at the present position to see if it is
still relevant to the target audience, fulfills needs, customer shifts, market dynamics,
and company goals. Generally speaking, the moment you realize that there are unmet
needs, you must start thinking about re-positioning the brand.
According to Davis, it takes about three to five years to change the position. There are
five different criteria to judge if there is need for updating2. The criteria are
illustrated graphically with the help of figure 23 on the next page.
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Value
Does the target market value our positioning? If it does, then there is no need to change the
positioning. If it does not, then there should be a cause for concern about changing the
positioning of our brand. To realistically assess the situation, we need to ask ourselves the
following questions:
·
Do customers feel motivated to buy? Any drop in the level of sales should indicate a
corresponding drop in motivation. However, before waiting for that eventuality, we
should conduct research from time to time to assess the level of customers’ motivation to
buy.
·
Do they really prefer over competition? Continued preference of our brand is an
indication that we do not change the positioning. Our research about how our brand
stacks up against competition is a fair guide to gauge if a shift in positioning is required.
·
Do they really feel getting benefits? Should there be a change in customers’ perception
about getting the expected benefits; the time is then ripe for studying the evolving
changes and acting on keeping the brand current and contemporary.
·
Do they feel their needs are being met? This is an extension of the preceding question and
requires finding out any unmet needs that may have arisen due to evolving changes. Does
the market allow us to charge a premium? If our brand is enjoying the pinnacle, then it
should enjoy price premium with indication of not causing a shift in positioning.
However, continual research should send us signals about the need to cause desired shifts
in a way that we maintain product credibility and the pinnacle.
·
Does the positioning cut across segments? A strong position should take us into a multisegmental situation. If it does not, then we may look into the reasons for weak
positioning and the need to cause a shift.
Uniqueness
Does the position make our brand unique and exclude competition? The moment customers
stop considering our brand as unique, we should have a cause for managing a shift in
positioning. We should consider the following questions:
·
Do customers consider our brand positioning as something really unique, different from
others?
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Figure 23
Five Criteria
To
Update Brand Position
Fit
Does it fit our
organizational?
Goals?
Value
Focus on the benefits
customers’ value
Sustainability
How long can we
sustain the
Position?
Credibility
Uniqueness
Competitor
absent
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Is the position credible?
Source: Scot M. Davis, “Brand Asset Management”
·
Does our brand really offer a unique value proposition? We should not leave anything to
our judgment. Research should be carried out to determine if customers still perceive our
offering carrying the USP we created.
·
Do customers immediately recall our brand when we tell them the position? If they do not,
then our brand has lost uniqueness and desires a shift in positioning.
Credibility
Is our brand positioning credible in the marketplace? Credibility comes with keeping the brand
contract while we go through innovations to stay current. A consistent customer perception that
our brand is credible is one factor that sustains our brand’s position. If the case is otherwise, then
we must ask ourselves the following questions:
·
What must be done to make our positioning credible? An analysis of promises made and
delivered, that is, brand contract must be carried out to determine how we can make our
position credible.
·
Are there competitive brands that are as much credible? If others also are as much credible
as our brand, then it calls for an effort to offer customers even higher value not necessarily
through the physical aspects of the product, but through other variables of the marketing
mix.
·
Is the positioning credible enough to let management commit financial resources? An
exceptionally strong positioning should allow management to commit more resources. If
company XYZ is successful in achieving the target volumes by delivering free, then it
Should have the confidence to start investing into restaurants to expand its business and
determine the shift in positioning expansion and growth will cause.
Sustainability
Can we sustain the position for a long time? Uniqueness of the selling proposition brings
sustainability to positioning. A famous tea brand may have the confidence to sustain its position
on the ground that its exceptionally attractive color, aroma, and taste owe to a special variety of
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tea crop along with blending expertise of the company. Also knowing that it is hard for others to
follow them may double their confidence that position can be sustained. Should there be
questions about sustainability, may those look like the following:
·
Is it that we can no longer sustain the position? Knowing that others are catching up with
us, we should consider introducing newer features and a shift in position with credibility.
·
Is it that the needs and wants will remain the same for quite sometime? Knowledge of a
change of needs and wants should make us work on improvements and management of
shifts in positioning. Japanese cars that were mostly positioned on their fuel efficiency and
provision of services have gone past such positions and successfully managed shifts to
positions of newer environment friendly technologies. Hybrid models (that run on gasoline
and battery generated power) by Toyota and Honda are excellent examples of sustaining
positions with credibility while they address to changing needs of customers – needs to
have cars that are innovated and yet fuel efficient.
·
Is it that the position might be copied quickly by the competition? The shift in positioning
should be caused either by increasing value to the customer or repositioning the
competition by communicating what your product is not, virtually meaning what
competition is. The ice cream clash between Yummy and Wall’s centered on Yummy’s
advertising claim that its ice cream was not a non-dairy ice cream, meaning that Wall’s
was.
·
Why do we need to sustain the position internally and externally? A company must be
clear about the level of internal mobilization of resources – human and material – and be
sensitive to the need for effective customer-driven marketing. One without the other may
disturb sustainability.
Fit
Does it have a perfect fit with the organization? No matter how attractive and logical a
positioning may be, it is not worthy of creating and maintaining if it does not have a fit with the
organization. We must consider the following questions to ensure that there is fit of positioning
with the organization.
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·
Does it promise fulfilling our goals? If the position cannot help the company fulfill its
goals, it needs to be changed. Positioning stems out of the understanding of the category
followed by segmentation and differentiation. It therefore has to flow out of the strategic
vision for the business, meaning it must be able to create a level of business that fulfills
goals.
·
Does it have the potential to fill the growth gap? An extension of the above explanation,
god positioning must contribute toward filling the growth gap.
·
Will it really enhance value and profitability of the company? Good positioning must offer
value to the company and add to profitability. If it does not, then it requires changes.
All the variables of the above-discussed criteria will guide us to decide whether or not we should
change our positioning.
2. Brand positioning should drive all brand strategies
Our discussion early with regard to changing goals for the fast food restaurant was clear enough
to suggest how strategies are driven by positioning. As long as the company has thrust on free
delivery, its strategy will be to have a credible delivery system in place.
The moment growth starts necessitating branching out into restaurants the strategy will be
different. The strategy will be to highlight presence through utility restaurants for attracting
customers there while simultaneously supplement the existing delivery system. A changed
position in response to growth and expansion causes changes in strategies. The job of managers
is to ensure that change takes place with credibility and no disturbances at all.
3. Senior management must lead the charge
Total commitment on part of the management is essential. They have to prove that their support
is based on sincerity to the brand; it is going to set an example for the rest of the company. In
other words, their support to strategies will mark their commitment to those strategies and goals.
Others will follow.
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4. Employees bring positioning to life
Despite being externally driven, positioning has to be internally sold to all employees. Internal
and interactive marketing is required to bring everyone on the same wavelength. All employees
have to become brand ambassadors and work for bringing the positioning to life internally first
and externally later.
Scot Davis puts the requisite internal marketing in an effective and easy-to-understand way by
coining the acronym AUDIENCE. It stands for awareness, understanding, direction, inspiration,
engagement, naturalness, criteria, and education. The following has to be achieved through
AUDIENCE for maximizing positioning:
AUDIENCE
·
A: Awareness: All in the company should be able to clearly state brand positioning.
·
U: Understanding: Thy must understand why the particular brand positioning was chosen
and how that affects their daily operational routines. If positioning is about consumerfriendly pricing, the all must be sensitive to achieving cost efficiencies. If positioning is
about high quality, then all must pay attention to creating it eight from purchasing to
production to logistics, and inventory management.
·
D: Direction: Provides a sense of direction in standardizing the operations and service
standards. The standards make it easy to deliver the promise and also lay foundation for
quality management. The topic of this lecture is a continuation of the concept of
AUDIENCE as partially discussed in the previous one1. It also discusses the fifth and the
final principle of repositioning. With that concept wrapped up, it concludes discussion on
positioning with the understanding of how to choose a realistic positioning statement.
·
I: Inspiration: Your colleagues should be inspired by the results that you generate out of
the formal and informal research about the positioning rationale. Those results should
create a sense of inspiration to work for the brand objectives.
·
E: Engagement: With the right sense of direction and inspiration, everyone will feel
engaged in working for the positioning.
·
N: Naturalness: If the right people are in place, then it will be natural for them to work for
the stated objectives. Having the right people is important for positioning to work.
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·
C: Criteria: Establish criteria for rewards on achievement of objectives. Those rewarded
should set examples for others to feel motivated.
·
E: Education: Train your people to become brand ambassadors.
5. Strong brand positioning is customer-driven
·
Without getting into repetition, a correct brand picture provides you with a lot of data and
information. Using that, you can come up with what is exactly the customer’s needs,
strengths and weaknesses of your and competitive brands. Armed with that information,
you can create the right promises, deliver them, and maintain the contract to have a strong
position.
Communicating the actual positioning
The most challenging decision here is to decide about the actual positioning, meaning the
communication that you direct toward the target. Having the right information is not a guarantee
that you will come up with the right most statement and strategies.
Given the sensitivity of the matter you need to choose a position, which has the strongest appeal
to the target audience and the one the company can sustain over a long time. Toward that
objective, you should develop a few strategies and then see which one is the most suitable in
terms of positioning your brand.
The challenge stems from the fact that your brand carries more than one benefit. Talking about
all of them does not have the punch. To keep your message straight forward and strong, you
have to pick one of the benefits as the basis of your positioning statement.
In the case of brand XYZ, the positioning statement is very clear. It takes into account all the
components – the category in which the brand is going to operate, the competitive benchmarks,
the target market, and the point of difference.
The challenge here is, out of so many benefits the brand is going to offer (good price, high
quality, easy availability, and good looks to name a few), which is the one that will keep the
message simplest and strongest to position the brand in the oversimplified mind.
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Positioning considerations
The criteria against which you can measure the decision mechanism can consist of the following
considerations:
·
One could be related to quality.
·
One could be related to price.
·
One could be related to accessibility.
·
Another could talk about the taste profile.
·
Yet another could emphasize on appearance dimensions.
·
You may think that talking about revolutionizing the service at lunch time is the hallmark
of the marketing effort and hence a relevant consideration.
·
Or, you may like to talk about the variety the brand XYZ offers.
·
Any other that you may think of.
All of the above positioning considerations sound convincing. Whichever the company may like
to choose has to stem from customer’s point of view so that he can own it. For that the company
must evaluate it against criteria like:
Evaluation criteria
·
Are the product’s looks and appearance compatible with the positioning?
·
How strong is the consumer motivation behind this positioning?
·
What size of market is involved in such positioning?
·
Does it capitalize on competitors weaknesses?
·
Is this positioning distinctive and specific?
·
What financial resources this positioning requires?
·
Is this a sustainable positioning, or are competitors going to imitate this in no time?
·
Does this positioning leave us an alternative to switch to another positioning in case this
failed?
·
Does this justify a price premium?
The best way to choose the right positioning is to pick each consideration and evaluate it against
all the evaluation criteria one by one. Going through this process of evaluation, you will come up
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with the most convincing positioning for the brand.
Coining the message
Once you have decided the positioning for the brand, you can coin the brand’s message as the
outward expression of the brand’s inner substance. This is the message (slogan or ad line) that
appears in all your communications, including the product’s package. You must take charge of
positioning; otherwise competitors will be quick to do that to your loss.
Positioning is the single most important activity in developing your brand management strategy.
If you craft it right, then your decisions to introduce new brands, extensions, pricing, and
communication become fairly straightforward, as you will see in the coming lectures.
Summary - positioning
Positioning stems from the areas of segmentation and differentiation. Knowledge about the
business you are in, the target market, and the point of difference that matters for your product
lays the foundation for positioning of your brand. Once done with that, you communicate the
position of your brand to the target market.
Positioning is very central to brand strategy. All operational strategies stem out of the
positioning of a brand. Propounded as a concept by two advertising executives, it followed the
product and the image eras.
Positioning is what you do to the mind of a consumer. You communicate a piece of information
about your product in a way that it gets lodged in the mind of the consumer. If the product is full
of promises and upholds the brand contract, it becomes difficult for competition to dislodge it.
Every brand manager should strive to create a strong position for his/her brand. There are certain
principles that you must follow to create a strong position. While you improve your brand to
keep it current, you must manage the desired shift in positioning in a subtle way. The brand must
not lose credibility.
You must be careful and highly analytical in choosing the right position for your brand, for you
should position it from the platform of one benefit. Talking about all benefits in your
communications leads to confusing the consumer. Different benefits should be weighed against a
set of criteria to choose the best position for the brand.
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